After another round of meetings this week — public, private
and behind closed doors — the chasm between city leaders and residents over
rewrites to the gas drilling ordinance appears to have widened considerably.

The City Council appeared satisfied with the rewrites during
a work session last Tuesday, giving little feedback to the staff on the fifth
draft other than to ask how to best explain the final product to residents.

On Thursday, residents met in a private home to discuss what
was still missing from the new rules. Vicki Oppenheim pointed out that air and
water testing — provided for in earlier drafts — had been removed in the latest
draft.

“I’m angry,” said Oppenheim, who was member of the task
force that recommended what to include in the rewrites.

The Denton City Council will have a public hearing this
Tuesday on the city’s rules for natural gas drilling and production.

The hearing will consider the fifth draft of rewrites since
October. The council’s agenda includes a vote on whether to approve the new
rules.

Residents have been pushing for rewrites since 2009, after a
drill site went up at the Rayzor Ranch development. The city made some key
changes in 2010, including increasing setbacks to 1,000 feet and setting up a
gas well inspection division. However, work on the rewrites didn’t begin until
early 2012, when the city appointed a task force to make recommendations. That
work soon became controversial — three of the five task force members had
industry ties and the first draft, ostensibly based on the group’s
recommendations, contained few changes to the original ordinance.

Council member Kevin Roden called the process bungled on his
blog in October, but held out hope that the city would still get a strong
ordinance.

Residents said Thursday that the rules in the fifth draft
remain weak, particularly in comparison to other area cities. In addition to withdrawing
air and water testing and monitoring, the city has not addressed many other
issues that residents have repeatedly requested be included or otherwise
addressed.

Adam Briggle had outlined the issues on the blog for Denton
Stakeholders Drilling Advisory Group, or DAG.

He also met with the city’s gas well inspector, Darren
Groth, to hear an explanation on the stalled items Monday.

After meeting with Briggle, Groth told the City Council on
Tuesday that there were two main items outstanding for DAG — the lack of
regulation of compressor stations and testing of water wells.

Briggle said he disagreed with that characterization, and
wrote an e-mail to the City Council on Wednesday to clarify the number and
nature of the concerns.

Residents want to apply zoning rules and increase setbacks
for production sites with fewer opportunities for operators to reduce those
setbacks with variances or claims of vested rights. They want more protection
for the air by requiring certain equipment and forbidding certain practices.
They also want to protect water sources by limiting the use of open pits and
requiring more testing and monitoring.

Briggle had come to City Hall last Tuesday for the 4:30 p.m.
work session, but the City Council went into closed session, returning to the
discussion only after holding its regular meeting.

After waiting more than 90 minutes, Briggle gave up and
left, citing family obligations.

During the work session, council member Jim Engelbrecht
asked whether the city attorney’s written explanation of items not included
could be provide to DAG and other residents. City Attorney Anita Burgess had
taken the items from the DAG blog and answered them for the council in a memo,
but told the council that communication was protected under attorney-client
privilege.

Instead of releasing the memo, the council asked Groth or
another member of the planning staff to meet with residents, perhaps providing
a written a version of what Groth told Briggle.

Groth agreed, but Briggle said he declined to invite the city
to Thursday’s meeting of concerned residents.

The residents reviewed the explanations during their
meeting, which showed the city had claimed legal pre-emption, regulatory
takings and vested rights prevented them from writing more protective rules.

City documents have shown that Denton could spend $165,000
or more on contracts with three different law firms and one technical
consultant in reviewing the rewrites.

The city has since posted the answers on the gas wells
inspections page of the city website, www.cityofdenton.com.

Bryn Meredith, longtime attorney for Dish and consultant to
other cities on oil and gas production ordinances, including Corinth, said
there may be more to Denton’s battle than legal theories of regulatory takings,
pre-emption and vested rights.

In his experience, the continuing low price of natural gas
is creating new economic pressures for operators, and they, in turn, are
looking for regulatory relief.

In 2005, when natural gas prices hovered around $10 per Mcf
(1,000 cubic feet) at the wellhead, operators weren’t objecting to local
government rules that might have otherwise seemed excessive, Meredith said.

But the market careened downward in 2009, and gas prices hit
a low of $2.98 per Mcf in September 2009, according to the U.S. Energy
Information Administration.

Prices have not recovered, and continue to hover around $3
to $3.50 per Mcf at the wellhead.

Most operators drilling the Barnett Shale have said gas
prices need to be between $5 to $7 per Mcf in order for a well to be
profitable. However, one local company, Eagleridge Operating, has said publicly
that it believes the market remains viable even at $2.70 per Mcf.

“Several agents have said to me recently that they are
looking at ways to cut costs on unprofitable wells,” Meredith said.

One of those ways is to resist rules from local governments,
such as requirements for masonry screening walls or inspection fees, he said.
Denton funds its gas well division with inspection and other fees.

Two industry groups have sued the city of Arlington for a
$2,400-per-well fee it adopted in 2012, meant to offset the costs to hire and
train firefighters to fight gas well fires.

Arlington said it needed the measure so that its first
responders could do their job, rather than waiting six hours for a response
team to come from Houston or Tulsa.

Operators said the fee is unfair because they are asked to
pay more than others doing business in the city.

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